01—Abstract
Summary
Summary of the 10-Q filed May 6, 2026. Cited figures are marked; the original filing is the authoritative source.
CDW Corporation's first-quarter 2026 Form 10-Q shows net sales rising 9.2% to $5.68 billiona from $5.20 billion, with higher sales across all operating segments.
Gross profit grew 6.0% to $1.19 billionb, but gross profit margin fell to 21.0% from 21.6%, which the company attributes mainly to a lower contribution of netted down revenue. Operating income increased 4.0% to $376.0 million, and net income rose to $235.4 million from $224.9 million. Diluted EPS was $1.82 versus $1.69 a year earlier.
Non-GAAP net income per diluted share was $2.28c compared with $2.15. Cash generation was weaker. Net cash provided by operating activities was $274.8 million versus $287.2 million, mainly because merchandise inventory rose $257.6 million, partly offset by a $341.3 million increase in trade payables.
The cash conversion cycle lengthened to 16 days from 15 days, and days of sales outstanding rose to 96 from 86. Net debt was $5.06 billiond, compared with $5.16 billion a year earlier. The company repurchased 1.6 million shares for $201 million and paid $81.1 million in dividends.
It had $1.9 billion of availability under its revolving loan facility at quarter end. Segment results were mixed. Commercial net sales grew 9.6%, but its operating income fell 1.7%.
Government gross profit declined 7.6% on a lower margin, while Education operating income rose 55.7%. The company's UK and Canada operations, reported as Other, grew net sales 17.9%. Management cited higher compensation, including performance-based incentives, and investments to support AI initiatives as drivers of selling and administrative expense growth.
02—Key points
Key Highlights
- Net sales increased 9.2% to $5.68 billion, with higher net sales in all operating segments; on a constant currency basis, net sales rose 8.4%.
- Gross profit margin declined 60 basis points to 21.0%, mainly due to a lower contribution of netted down revenue.
- Operating income rose 4.0% to $376.0 million; operating income margin was 6.6% versus 7.0%.
- Net income was $235.4 million, or $1.82 per diluted share, compared with $224.9 million, or $1.69 per diluted share, a year earlier.
- Net cash provided by operating activities was $274.8 million, down from $287.2 million, primarily due to merchandise inventory growth of $257.6 million.
- The company repurchased 1.6 million shares for $201 million and paid a quarterly dividend of $0.630 per share; net debt was $5.06 billion at March 31, 2026.
- Management noted a segment realignment effective January 1, 2026, into Commercial, Government, and Education reportable segments, with CDW UK and CDW Canada reported in Other.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2026, CDW kept $0.04.
- Revenue$5.68B100.0%
- Cost of revenue−$4.49B79.0%
- Gross profit$1.19B21.0%
- Operating costs−$814.0M14.3%
- Operating income$376.0M6.6%
- Interest, other & tax−$140.6M2.5%
- Net income$235.4M4.1%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2026filed May 6, 2026Financial Statements
Q1 FY2026 against Q1 FY2025
| Line item | Q1 FY2026Q1 FY2025 | Change |
|---|---|---|
| Revenue | $5.68B$5.20B | +9.2% |
| Cost of Revenue | $4.49B$4.08B | +10.1% |
| Gross Profit | $1.19B$1.12B | +6.0% |
| SG&A Expenses | $814.00M$760.90M | +7.0% |
| Operating Income | $376.00M$361.40M | +4.0% |
| Net Income | $235.40M$224.90M | +4.7% |
| EPS (Basic) | $1.82$1.70 | +7.1% |
| EPS (Diluted) | $1.82$1.69 | +7.7% |
| Shares Outstanding (Basic) | 129.00M132.50M | −2.6% |
| Shares Outstanding (Diluted) | 129.50M133.50M | −3.0% |
05—Questions
Frequently Asked Questions
How did CDW perform in the first quarter of 2026?
Net sales grew 9.2% to $5.68 billion, gross profit rose 6.0% to $1.19 billion, and operating income increased 4.0% to $376.0 million. Net income was $235.4 million, or $1.82 per diluted share, up from $1.69.
Why did gross profit margin decline?
Gross profit margin decreased 60 basis points to 21.0%, primarily driven by a lower contribution of netted down revenue, according to the filing.
What drove the weaker operating cash flow?
Net cash provided by operating activities decreased $12 million to $274.8 million. The decline was primarily attributable to merchandise inventory, which the company said reflected customer-driven stocking positions tied to higher demand, partly offset by a $341.3 million increase in accounts payable-trade due to payment timing.
How is CDW returning capital to shareholders and what is its debt position?
During the quarter CDW repurchased 1.6 million shares for $201 million and paid $81.1 million in dividends. Total unsecured indebtedness was $5.6 billion, net debt was $5.06 billion, and the company had $1.9 billion of revolving loan availability. The company stated it was in compliance with its debt covenants.
How did the segments perform?
Commercial net sales rose 9.6% to $3.57 billion, but its operating income fell 1.7% to $354.7 million. Government net sales rose 4.6% to $632.9 million, while its gross profit fell 7.6%. Education operating income rose 55.7% to $39.4 million, and Other, which includes CDW UK and CDW Canada, had net sales growth of 17.9% to $802.5 million.
06—Continue